The Strategist

Peloton to suspend production due to lower demand

01/24/2022 - 09:11

According to CNBC, Peloton will halt production of exercise bikes and treadmills for two months in February and March, as evidenced from internal documents of the company. Peloton cited poor demand and fierce competition as reasons for its decision.

Tony Webster
Tony Webster
Until June, the company has halted production of an enhanced version of its Bike+ fitness equipment. Peloton will also stop producing the Tread+ treadmills in fiscal 2022.

The firm underestimated the pandemic's production volume and now has "thousands of workout equipment and treadmills" on hand. Over the last year, Peloton's market capitalization has dropped by about $40 billion.

As a result of the shutdown, the company's stock has dropped more than 20% to $23.25 a share. According to the TV station, this was the lowest level in the previous year.

When fitness centers were closed due to the coronavirus in 2020, demand for Peloton's home workout equipment increased. The company recalled their treadmills in 2021 after the US Consumer Product Safety Commission (USCPSC) received reports of accidents, one of which was deadly, among minors. The treadmills' free workout option was then eliminated, and a $39 monthly subscription was added. Peloton put a halt to hiring in November.